Every single employee of the Nihon M&A Center Group behaves as a corporate citizen recognizing that engagement with environmental issues is a social duty and it is incumbent upon them to act in all fields of work with consideration to the environment, including prevention of environmental pollution, reduction in greenhouse gas emissions, mitigating and adapting to climate change, biodiversity and conservation of the ecosystem.
Furthermore, in our daily work we endeavour to reduce burdens to the environment through encouraging reduction of waste, low energy consumption and saving resources, whilst taking into account the risks and opportunities that climate change poses for the business environment.
Identifying and responding to climate change risks
This is a summary of identified climate related risks and responses by the Nihon M&A Center Group
| Types of risks |
Time horizons of risks happening |
Anticipated risks and countermeasures |
| Transition risks toward a low-carbon society |
Policy / Regulation risks |
Mid-term
(4-10yrs) |
Increase in prices relating to greenhouse gas emissions
If Carbon Tax and / or Emission Trading Scheme are / is introduced in the future, there is a risk that costs of energy use will increase. In case these new policies are introduced, we need to calculate the degree of impact on profitability, so we started calculating and monitoring the amount of CO2 emissions since FY2019. Going forward we will broaden the scope of our calculations and assess the level of impact as well as consider the business plan. |
| Policy / Regulation risks |
Mid-term
(4-10yrs) |
Tightening of obligations to report greenhouse gas emissions
Nihon M&A Center is currently not subject to reporting obligations determined by the Japanese government as well as any local governments to report greenhouse gas emissions and reduction plans, hence we are not affected. Going forward, if there is an expansion of the scope of reporting obligations or a newly created energy-saving policy, additional costs may be incurred with regard to our operational improvement and facility introduction, depending on the degree of the obligations. Therefore, we are broadening the scope of CO2 emissions calculations. |
| Market risks |
Mid-term
(4-10yrs) |
Changes in behavior of our clients
There is a risk that our clients, suppliers and investors may prefer other, more sustainable companies due to changes in their behavior caused by growing interest in the risks posed by climate change, the spread of ESG-related investment and recognition of SDGs. At our company, the IR Office is promoting our ESG-related initiatives as the main department in charge. |
| Reputation risks |
Short-term
(-3yrs) |
Increase in concerns or negative feedback from our stakeholders
There is a risk that our societal reputation may be damaged if the requests from clients, investors and society on climate change issues progress rapidly, and our responses are delayed or we lack appropriate information disclosure. At our company, the IR Office is promoting our ESG-related initiatives as the main department in charge. We have selected several companies as references for ESG-related initiatives and compared/evaluated our initiatives with the reference companies, in line with the evaluation framework of several ESG evaluation companies; if our initiatives are inferior to others or we believe further improvement is required, we report to our management to discuss future measures to take to deal with the situation. |
| Physical risks associated with climate change |
Acute risks |
Short-term
(-3yrs) |
Increase in and exacerbation of extreme weather events such as cyclones and floods
We operate across 7 offices in Japan and 5 offices abroad, and around 90% of our total employees are based in Japan.
There is a risk that our operations may be suspended if we suffer a breakdown/cutoff in transportation infrastructure connecting our business locations and clients / partners or information infrastructure, due to any extreme weather event in Japan such as cyclones, floods or heavy rain and thunderstorms caused by global warming.
In addition, as our business operation is a labor-intensive model, a reduction in the number of days worked due to the events described above may lead to the risk of our labor expenses-to-sales ratio increasing.
As our countermeasures against these risks, we at Nihon M&A Center are promoting the strengthening of our system infrastructure so that even if our business locations are hit by a disaster, it will not lead to an effective shutdown of our functions. In addition, we are also endeavoring to reduce the risks during disasters by establishing a structure that allows all employees to telework during emergencies and remote meetings and due diligence with clients.
At all of our offices, we have disaster stockpile items at hand and we periodically conduct evacuation drills.
Any intensification of natural disasters has the possibility to cause damage to the local economy. At our company, we have experience of flexibly establishing satellite offices throughout the country during emergencies. Through this experience, we can develop further-localized business activities and speedily grasp the needs of potential clients that desire M&A. |
| Chronic risks |
Long-term
(11yrs-) |
Rise in average temperatures and sea level
There is a risk that costs may increase from a drop in productivity caused by more frequent heat strokes and / or from much use of air conditioning, due to a rise in average temperatures. There is also a risk of flooding due to a rise in sea level.
In the ASEAN region, there is a risk of frequent flood damage due to extreme heat and prolongation of the rainy season caused by global warming. |
Measures to mitigate climate change
As one way to reduce greenhouse gas emissions we are working to reduce our levels of electricity consumption.
We promote the so-called Cool Biz and Warm Biz initiatives in Japan to set air conditioning temperatures at a certain high level in the summer months and also at a certain low level in the winter months. This is one form of engagement for saving energy consumption, which also includes varying specific settings of air conditioning in different workspaces, powering down non-essential equipment and generally raising awareness about environmental matters among our employees.
Methods for adapting to climate change
Starting with protection from general flood damage, the Nihon M&A Center Group continuously takes action to minimise the impact on the business with systems to back up the server and to preserve important data in the cloud. We aim to minimise any risk of physical damage that our business might otherwise incur through climate change.
GHG (greenhouse gas) emission reduction targets
With the level of emissions in the year 2019 as a basis, the target is to reduce the level of GHG emissions resulting from electricity use in our Tokyo head office by 1% per full time employee by the year 2025. To achieve this we continuously endeavour to reduce energy consumption through air conditioning temperature controls and reviews of the requirement for the use of lighting location by location.
GHG (greenhouse gas) emission data
Nihon M&A Center Tokyo head office GHG (greenhouse gas emissions)
(Unit: t-CO2)
GHG (greenhouse gas) emission data
(Unit: t-CO2)
*There is no Scope 1 energy usage, so Scope 2 forms the basis for calculation of GHG emissions
*Scope 1 and Scope 2 measured by the Tokyo head office
*Scope 3 measured by aircraft emissions on business trips (April 2016~August 2017 domestic routes only)
*Since January 2021, all electric power used in our Tokyo headquarters building, the so-called “Tekko” building, is generated 100% by renewable energy (biomass power generation).
This is the first large scale mixed-use building in Japan to be powered 100% by renewable energy.
For this reason, the GHG emissions of Scope 2 were calculated using CO2 emission factor of 0 (zero) during the period from January to March 2021.
In April 2022 we measured GHG emissions again using more precise detailed data for energy consumption, demonstrating that a new record was set relative to the newly defined precise figures released since FY2018.
Energy consumption data
(Unit: kWh)
*Based on Tokyo head office
Consideration for the environment of our planet
Reduction of burdens to the environment
Our employees strive to reduce burdens to the environment and lower energy consumption through use of public transport, use of IT and reduction of unnecessary printed materials.
Our company has a system necessitating the use of the individual's ID card when printing documents, which captures information on how much each individual uses printers, in turn helping prevent unnecessary use of paper resources and contributing to information security.
M&A for reducing burdens to the environment
There are many ways in which M&A can contribute towards reducing the environmental burden on society.
For example there could be a case where a transportation company which has a high proportion of its business taking cargo from Tokyo to Nagoya combines through an M&A transaction with a company with a high proportion of its business taking cargo from Nagoya to Tokyo, and they integrate operations. It is most efficient when a transportation company operates with a loading capacity close to 100%, which leads to a reduction of the burden for the environment.
Strengthening overseas M&A
We are working to increase our level of cross-border SME M&A activity. We expect Japanese companies acquiring companies overseas will have the opportunity to export excellent environmental technologies and that this will help alleviate the burden to the environment.
